Bristol secures funding to develop energy services company – a UK first for local government

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Plans to establish a citywide energy services company to spearhead renewable energy and energy efficiency projects worth up to £140 million and helping to create up 1,000 jobs were launched today by Bristol City Council Leader Barbara Janke.

Bristol is the first local authority in the country outside London to receive a £2.5 million grant from the European Investment Bank (EIB) to meet most of the costs of developing an energy services company and investment programme.

Bristol City Council Leader Barbara Janke said: “This is a bold but necessary move for the city and we will be one of the first local authorities in the country to drive forward with such ambitious energy efficiency and renewable energy plans.

“In practical terms this will lead to cheaper bills for thousands of residents through investment in energy saving measures. This will also mean that as a city we will be generating our own energy, primarily through a major investment in solar energy generation.

“It will help generate up to 1,000 new jobs in the construction and environmental technologies sectors – many I hope going to local firms and employees. The investment programme should also kick-start and attract much bigger investment in the city potentially up to £2 billion.”

Simon Brooks, European Investment Bank Vice President said “The launch of the European Local Energy Assistance programme in Bristol will both improve energy efficiency and ensure supply of low carbon and renewable energy in the city. The broad range of projects planned in Bristol will inspire similar cities in the UK and across Europe to look at ways to accelerate deployment of feasible energy efficiency and renewable energy schemes.”

The plans were launched today at Redland Green School – the first secondary school in the city to install solar photovoltaic modules on its roof. The school is taking part in the City Council’s Solar Schools programme, which is installing solar energy systems at no costs to schools.

As part of this programme, schools will also be installing energy efficiency works such as energy efficient lighting and insulation and rolling out energy awareness activities with staff and pupils in the school. It is planned that the proposals announced today will enable this programme to be massively expanded.

The Bristol energy services company will be owned by the City Council on behalf of the citizens of Bristol. It intends to secure half of its funding – around £70 million - from the European Investment Bank, the rest from private sector investment. It would be an arms-length organisation and generate income through energy savings and energy generation.

The investment programme will initially be focused on:

· Improving the energy efficiency of over 6,000 homes and public buildings through wall insulation and other measures· Installing over 7,000 renewable energy generating systems on homes and public buildings such as solar panels and wood fuelled heating· Developing small district heating networks where several buildings are heated from a single, efficient boiler. These will be located in areas where there are several high-energy users close together such as in the city centre.

This investment programme would:

· Invest up to £140 million into the city, creating up to 1,000 new jobs, many locally – in the environmental technologies and construction sectors· Reduce the carbon emissions from homes by up to 3% - helping to achieve the city’s ambitious carbon targets· Improve energy security and reduce fuel poverty in the city by making buildings more energy efficient· Support the market for renewable energy systems and further develop Bristol’s leading position in environmental technologies

Notes to editors

The technical assistance grant has been secured from the European Investment Bank’s ELENA (European Local Energy Assistance) programme. The City Council is providing 10% cash match funding (around £250,000) to receive up to £2.5 million for financing the costs related to feasibility and market studies, procurement and legal procedures, financial advice as well as environmental assessments.

At the heart of the investment programme will be a new team of energy professionals and council specialists working for the Energy Services Company.

The planned investment programme intends to make use of UK financial incentive arrangements that are in place or are currently being created by the Government. Specifically these include:

· Feed in Tariffs, which support small-scale renewable electricity generation such as through solar photovoltaic panels, wind turbines or hydropower turbines. Payments are made to organisations, businesses and homeowners for every kilowatt-hour of electricity they generate, or, for electricity that is exported to the electricity distribution network.

· Renewable Heat Incentive, which is a government subsidy to support renewable heat generation. Similarly to the feed-in-tariff, payments are made to public sector organisations, businesses and from autumn 2012 on to homeowners for biomass, ground source, water source, solar thermal and biomethane projects.

· The Green Deal - upfront finance for the installation of energy efficiency measures that will be attached to the building’s energy meter. Homeowners can pay back over time with the repayments less than the savings on bills, meaning many benefit from day one. This will be available from autumn 2012 and will help save carbon, energy and reduce fuel bills. The energy services company could potentially become a Green Deal provider and deliver measures on people’s homes without any upfront costs to the homeowners.

· Energy Company Obligations (ECO), which require large domestic energy supply companies to make financial contributions towards the Green Deal to support vulnerable and low income households and householders living in ‘hard to heat’ properties such as solid wall buildings. The Council is hoping to be able to access the ECO on behalf of Bristol’s citizens as part of its investment programme plans.